Churchill Downs to Reduce Purses 20%

Churchill Downs announced May 9 a 20% purse cut for its spring meet effective May 14, laying the blame on horsemen's groups for rejecting offers on signal distribution.

The cut, which had been suggested as possible by Churchill officials for the last several days, will affect overnight purses and could potentially result in a cut for the track’s fall meet, a news release said.

The Kentucky Horsemen’s Benevolent and Protective Association and Kentucky Thoroughbred Association are at odds with the track over revenue sharing on wagers placed through advance deposit wagering companies, including Churchill Downs Inc.’s TwinSpires.com platforms.

“We have been left with no option but to reduce overnight purses to offset the amount of lost handle because Kentucky horsemen have prevented horse racing fans from wagering through ADW platforms,” Churchill Downs president Steve Sexton said in the release. “We are disappointed because the failure to send the signal will negatively impact the product both on and off the racetrack. While we are still hopeful this impasse can be resolved, we have no choice but to act now.”

Rick Hiles, president of the Kentucky HBPA, said track officials normally discuss potential purse cuts or increases with his group prior to implementing them, but failed to do so this time.

“Before anything was done, they should have sat down and told us,” Hiles said. “If there has been a cut, or an increase, they usually sit down with us and discuss how the funds should be handled.”

Hiles said he believes the 20% reduction is unjustified, but also claims the track is just now providing the horsemen with purse-payout data to analyze properly.

“I don’t know if they can justify 20% -- maybe 10%,” he said. “We haven’t been privileged to get the numbers until now.”

Churchill Downs in its release claims it has nearly doubled host fees paid by ADWs to racetracks and horsemen. The track said TwinSpires.com has added 13,000 new customers and $25 million in new deposits this year.

“We would like those customers to be able to wager those funds on Churchill Downs races, but the KHBPA and KTA have refused to allow us to do so,” Sexton said.

David Switzer, executive director of the KTA, said he wasn't surprised by the purse cut.

"But we are disappointed; I guess it takes us back to the (2007) purse dollars," he said. "I guess there has to be some pain before the gain, and before we can get down to the table and get this all figured out."

Switzer said if nothing else happens, horsemen will keep an eye on the purses to see if there is an overage at the end of the meet. If that happens, he said, discussions can then take place on whether the additional funds can be paid back retroactively to spring meet recipients, or pushed ahead into the fall meet.

Not including separate-pool wagering, handle at the current Churchill Downs meet is $249,099,329, down about 1.75% compared with a similar period during the 2007 meet, according to The Jockey Club Information Systems. Paid purses for the current meet total $8,333,525, about 1.73% more than last year at this time.